REG - Deltex Med Grp PLC - New share plans and grant of share options

Deltex MedicalAnnouncement

12/06/2024 07:15

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RNS Number : 0454S  Deltex Medical Group PLC  12 June 2024

12 June 2024

 

Deltex Medical Group plc

("Deltex Medical", the "Company" or the "Group")

 

Adoption of new share plans and grant of share options to directors and
employees

 

Deltex Medical Group plc (AIM: DEMG) announces that the Group has adopted two
new share incentive plans and has granted 366,900,000 options over new
ordinary shares of 0.01 pence each in the share capital of the Group (the
"Ordinary Shares") to certain employees and directors of the Group.

 

The proposals for the new share plans and proposed grants were first set out
in the Group's Annual Report and Accounts for the year ended 31 December 2023
published last month. The Group's 2003 Enterprise Management Incentive Plan
and the Group's 2011 Executive Share Option Scheme (together the "Legacy
Option Schemes") are more than ten years old and therefore under their rules,
no further new options over new Ordinary Shares can be granted. Accordingly,
the Remuneration Committee has decided to put in place two new share incentive
plans as set out below and award new options.

 

EMI Share Option Plan

 

The EMI Share Option Plan (the "EMI Plan") will be a plan under which up to 15
per cent of the Company's share capital from time to time can be made
available to award share options to the Group's employees and directors over a
ten-year period (the "EMI Options"). The EMI Options will be issued with an
exercise price at or above the market share price at the time of issue. Other
than in the event of a change of control, the EMI Options will vest in not
less than three years and will be exercisable for up to seven years
thereafter. Any EMI Options issued to executive directors of the Group under
the EMI Plan will be subject to performance conditions and will be restricted
in value to a maximum of 50 per cent of a director's salary.

 

Under the EMI Plan, a total of 178,900,000 EMI Options have now been granted,
exercisable at 0.105p per share, being the closing mid-market share price of
Ordinary Shares on 11 June 2024. Of these, 113,000,000 EMI Options have been
granted to directors as follows:

 

 Director         No. of options  Percentage of issued Ordinary Shares
 Andy Mears       56,500,000      2.98
 Natalie Wettler  56,500,000      2.98

 

In addition to a three-year vesting period, the EMI Options granted to Andy
Mears and Natalie Wettler are subject to performance conditions geared towards
the successful turn round of the Group's business and in particular, 30 per
cent will vest on the Group achieving breakeven earnings before interest,
taxes, depreciation and amortisation ("EBITDA") and the balance will vest on
the Group achieving £500,000 or more in EBITDA.

 

Executive Performance Plan

 

In addition to the EMI Plan, the Company has made a one-off issue of
94,000,000 performance options to each of the two executive directors (the
"Executive Performance Plan"), Andy Mears and Natalie Wettler, representing
4.96 per cent of the Group's issued share capital to each recipient (the
"Performance Options"). At the time of the 2023 fundraising no specific
incentive arrangements were put in place for the executive directors to align
their interests strongly with those of the Company's shareholders and this
performance plan now provides that alignment. In determining the level of
grants that have been awarded, the Group's Remuneration Committee had regard
to the limited resources of the Company following the 2023 fundraising and
restructuring, as well as salary sacrifices made.

 

 

The Performance Options are exercisable at 0.2p per share, the price at which
the new shares were issued at the fundraising in 2023 and a premium of
approximately 90 per cent of the closing mid-market share price of Ordinary
Shares on 11 June 2024.

 

The Performance Options will be exercisable between three and ten years after
issue subject to the same performance conditions as the options under the EMI
Plan, which are geared to achieving the successful turn round of the Group
leading to sustainable profitability for the business. Therefore, in addition
to a three-year vesting period, the Performance Options vest as to 30 per cent
on the Group achieving breakeven EBITDA and the balance will vest on the Group
achieving £500,000 or more in EBITDA.

 

Taking the EMI Plan and Executive Performance Plan together, the proportion of
the Company's share capital from time to time that can be made available to
award share options to the Group's employees over a ten-year period will be
limited to a maximum of 20 per cent of the total Ordinary Shares in issue.

 

Legacy Option Schemes

 

As outlined in the Group's Annual Report and Accounts for the year ended 31
December 2023, on 14 July 2023 the Group announced a fundraise at a share
price of 0.20 pence per new Ordinary Share. The effect of this fundraise was
to substantially reduce the value of the existing options over new Ordinary
Shares in issue. In light of this and the new incentive schemes and
performance conditions, the Group's Remuneration Committee has agreed with
Andy Mears and Natalie Wettler that they will waive their entitlement to,
respectively, 20,000,000 and 11,225,000 options which remain outstanding under
the Legacy Option Schemes (5,000,000 options held by Andy Mears lapsed last
month). Following this neither Andy Mears nor Natalie Wettler will retain any
options issued under the Legacy Option Schemes.

 

Related Party Transactions

 

The agreement with Andy Mears and Natalie Wettler to waive their entitlement
to options over new Ordinary Shares under the Legacy Option Schemes and the
issue of the options to Andy Mears and Natalie Wettler pursuant to the EMI
Plan and the Executive Performance Plan (the "Transactions") are deemed to be
related party transactions pursuant to rule 13 of the AIM Rules for Companies.
Accordingly, Nigel Keen, Chris Jones and Ben Carswell (being the directors of
the Group not taking part in the Transactions) consider, having consulted with
the Group's nominated adviser, Allenby Capital, that the terms of the
Transactions are fair and reasonable insofar as the Company's shareholders are
concerned.

 

For further information, please contact:

 

 Deltex Medical Group plc                                        01243 774 837
 Nigel Keen, Chairman                                            investorinfo@deltexmedical.com (mailto:investorinfo@Fitbitmedical.com)
 Andy Mears, Chief Executive
 Natalie Wettler, Group Finance Director

 Allenby Capital Limited - Nominated Adviser & Broker            020 3328 5656
 Jeremy Porter / Vivek Bhardwaj (Corporate Finance)              info@allenbycapital.com (mailto:info@allenbycapital.com)
 Tony Quirke / Stefano Aquilino (Sales & Corporate Broking)

 

 

Notes for Editors

 

Deltex Medical's technology

Deltex Medical's TrueVue System uses proprietary haemodynamic monitoring
technology to assist clinicians to improve outcomes for patients as well as
increase throughput and capacity for hospitals.

 

Deltex Medical has invested over the long term to build a unique body of
peer-reviewed, published evidence from a substantial number of trials carried
out around the world. These studies demonstrate statistically significant
improvements in clinical outcomes providing benefits both to patients and to
the hospital systems by increasing patient throughput and expanding hospital
capacity.

 

The Group's flagship, world-leading, ultrasound-based oesophageal Doppler
monitoring ("ODM") is supported by 24 randomised control trials conducted on
anaesthetised patients. As a result, the primary application for ODM is
focussed on guiding therapy for patients undergoing elective surgery, although
sedated patients in intensive care are still an important part of our
business. The Group's new, next generation monitor makes the use of the ODM
technology more intuitive and provides augmented data on the status of each
patient.

 

Deltex Medical's engineers and scientists carried out successful research in
conjunction with the UK's National Physical Laboratory ("NPL"), which has
enabled the Group's 'gold standard' ODM technology to be extended and
developed so that it can be used completely non-invasively. This will
significantly expand the application of Deltex Medical's technology to
non-sedated patients. This new technological enhancement, which will be
released on the new next generation monitor, will substantially increase the
addressable market for the Group's haemodynamic monitoring technologies and is
complementary to the long-established ODM evidence base.

 

Deltex Medical's new non-invasive technology has potential applications for
use in a number of healthcare settings, including:

§ Accident & Emergency for the rapid triage of patients, including the
detection and diagnosis of sepsis;

§ in general wards to help facilitate a real-time, data-driven treatment
regime for patients whose condition might deteriorate rapidly; and

§ in critical care units to allow regular monitoring of patients post-surgery
who are no longer sedated or intubated.

 

One of the key opportunities for the Group is positioning this new,
non-invasive technology for use throughout the hospital. Deltex Medical's
haemodynamic monitoring technologies provide clinicians with beat-to-beat
real-time information on a patient's circulating blood volume and heart
function. This information is critical to enable clinicians to optimise both
fluid and drug delivery to patients.

 

Deltex Medical's business model is to drive the recurring revenues associated
with the sale of single-use disposable ODM probes which are used in the
TrueVue System and to complement these revenues with a new incremental revenue
stream to be derived from the Group's new non-invasive technology.

 

Both the existing single-use ODM probe and the new, non-invasive device will
connect to the same, new TrueVue monitor which was released onto the market in
November 2023. Monitors are sold or, due to hospitals' often protracted
procurement times for capital items, may be loaned in order to encourage
faster adoption of the Group's technology.

 

Deltex Medical's customers

 

The principal users of Deltex Medical's products are currently anaesthetists
working in a hospital's operating theatre and intensivists working in ICUs.
This customer profile will change as the Group's new non-invasive technology
is adopted by the market. In the UK the Group sells directly to the NHS. In
the USA the Group sells directly to a range of hospital systems. The Group
also sells through distributors in more than 40 countries in the European
Union, Asia and the Americas.

 

Deltex Medical's objective

 

To see the adoption of Deltex Medical's new TrueVue monitor, comprising both
minimally invasive and non-invasive technologies, as the standard of care in
haemodynamic monitoring for all patients from new-born to adult, awake or
anaesthetised, across all hospital settings globally.

 

For further information please go to www.deltexmedical.com
(http://www.deltexmedical.com/)

 

Notification and public disclosure of transactions by persons discharging
managerial responsibilities and persons closely associated with them:

 

 1.    Details of the person discharging managerial responsibilities / person closely
       associated
 a)    Name                                                         PDMRs:

Andrew Mears     Chief Executive Officer
                                                                    Natalie Wettler  Finance Director

 

 2.    Reason for the Notification
 a)    Position/status                                              See 1a) above
 b)    Initial notification/Amendment                               Initial Notification
 3.    Details of the issuer, emission allowance market participant, auction
       platform, auctioneer or auction monitor
 a)    Name                                                         Deltex Medical Group Plc
 b)    LEI                                                          213800XN34P6LI8J6M39
 4.    Details of the transaction(s): section to be repeated for (i) each type of
       instrument; (ii) each type of transaction; (iii) each date; and (iv) each
       place where transactions have been conducted
 a)    Description of the Financial instrument, type of instrument  Options over ordinary shares of 0.01p each in Deltex Medical Group Plc

       Identification code                                          ISIN: GB0059337583
 b)    Nature of the transaction                                    Grant of options
 c)    Price(s) and volume(s)                                       Name             Options                     Price(s)  Volume(s)
                                                                    Andrew Mears     EMI Options                 0.105p    56,500,000
                                                                    Natalie Wettler  EMI Options                 0.105p    56,500,000
                                                                    Andrew Mears     Executive Performance Plan  0.2p      94,000,000
                                                                    Natalie Wettler  Executive Performance Plan  0.2p      94,000,000
 d)    Aggregated information:
       -  Aggregated volume                                         Andrew Mears: 150,500,000

                                                                    Natalie Wettler: 150,500,000
       -  Price                                                     See above
 e)    Date of the transaction                                      11 June 2024
 f)    Place of the transaction                                     Outside a trading venue

 

 

2.

Reason for the Notification

a)

Position/status

See 1a) above

b)

Initial notification/Amendment

Initial Notification

3.

Details of the issuer, emission allowance market participant, auction
platform, auctioneer or auction monitor

a)

Name

Deltex Medical Group Plc

b)

LEI

213800XN34P6LI8J6M39

4.

Details of the transaction(s): section to be repeated for (i) each type of
instrument; (ii) each type of transaction; (iii) each date; and (iv) each
place where transactions have been conducted

a)

Description of the Financial instrument, type of instrument

Options over ordinary shares of 0.01p each in Deltex Medical Group Plc

 

Identification code

ISIN: GB0059337583

b)

Nature of the transaction

Grant of options

c)

Price(s) and volume(s)

 Name             Options                     Price(s)  Volume(s)
 Andrew Mears     EMI Options                 0.105p    56,500,000
 Natalie Wettler  EMI Options                 0.105p    56,500,000
 Andrew Mears     Executive Performance Plan  0.2p      94,000,000
 Natalie Wettler  Executive Performance Plan  0.2p      94,000,000

d)

Aggregated information:

-  Aggregated volume

Andrew Mears: 150,500,000

Natalie Wettler: 150,500,000

-  Price

See above

e)

Date of the transaction

11 June 2024

f)

Place of the transaction

Outside a trading venue

 

 

 

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